Too clever by half, intricate and designed to obscure the reality. These are some of the comments about Uber’s contracts in the aftermath of the Supreme Court’s landmark ruling exactly a month ago which continues to generate huge discussion in employment circles. This is the ruling that brought an end to 5 years of bitter litigation between Uber and its drivers when the court decided the drivers were indeed ‘workers’, as they had always claimed to be, and therefore entitled to employment rights including the minimum wage, paid annual leave and sick pay. People Management reported how the ruling could upend the way the app-based economy works in the UK after the court ruled that drivers were working “for and under” Uber, regardless of how the arrangement was written into the contractual agreement and that essentially the drivers were “in a position of subordination and dependency in relation to Uber”. In court Uber had pointed to the drivers’ contracts and argued they framed the relationship, but the Supreme Court unanimously rejected that approach saying it was the wrong approach. So where does that leave us? What’s the right approach? What about all those gig employers with contracts not unlike Uber’s? Let’s find out. Anne Sammon has been advising on this extensively in recent weeks – she joined me by video-link to discuss that point:
Anne Sammon: “So prior to the Uber decision what we often thought from the decisions that we’d had up until that point was that if the court found that the paperwork was a sham, that was the point at which it would start looking at some of these questions about employment status. What the Supreme Court has done is said, actually, no, that’s not the test, what we’re going to do is almost disregard what the contract says even at the outset and look at whether or not you are a worker or an employee, or neither of those things, by looking at the reality of the situation.”
Joe Glavina: “One of the criticisms of Uber is they tried to ‘have their cake and eat it’. They wanted to use contracts to control the drivers yet say it was the service wasn’t theirs, they were just intermediaries. Legally, can that ever work?”
Anne Sammon: “You can’t have control in the contractual documentation and say that somebody isn’t a worker and that’s essentially the issue here. Uber wanted control to ensure consistency of service for their customers but then wanted to be able to say we don’t have control for the purposes of employment law when we’re looking at whether or not somebody is a worker, so those two things just don’t marry up. If you want consistency, and you want to impose contractual obligations that people will do certain things in a certain way and behave in a certain way towards their customers, that’s where we trip into, you know, you’re then exerting enough control that they have probably become workers for the purposes of employment status. I think the fundamental I think one of the fundamental things with the Uber case was that the contractual documentation was so out of line with the reality of the situation that it showed up immediately as being effectively a sham and very difficult to penetrate both for the court and for the individuals involved.”
Joe Glavina: “After the judgment Uber gave a statement saying whilst they respected the court’s decision but it focused on a small number of drivers on old contracts. They present it as if they lost on a technicality, implying that tweaking their contracts is all that’s needed. What do you make of that?
Anne Sammon: “So my view is that tweaking won’t be enough, because what we’re looking at here is the kind of fundamental of whether or not you exert control over the way in which people carry out the services that they are providing to you. That’s the fundamental issue with the Uber case in that Uber was trying to assert control over the drivers in terms of the types of cars that they drove and the way that they behave and what I mean by that is, essentially, that the system that they operated was kind of akin to what you’d see in a disciplinary process. So if you didn’t behave in the way that suited them, or that kind of met their expectations, then you were kicked off the app for a period and that period became longer as the transgressions increased and that feels a bit like a disciplinary process in that, you know, if you’re an employee, and you do something wrong you get first written warning, and then there’s an escalation. The other thing was that Uber really sat in between customer and driver so the drivers, for example, were never allowed to obtain the contact details for those customers other than when they were returning lost property so it really didn’t give the drivers the opportunity to kind of develop their own entrepreneurial skills, or their own business models or way of working, so that customers wanted to come to them specifically because Uber wanted consistency of service. So I don’t think tweaking is enough. There’s nothing in the contract that you could do to avoid those issues arising. All that you could do is kind of relinquish some of that control and that’s quite difficult if you’re trying to deliver consistent services to your customers using this type of workforce.”
Joe Glavina: “Last question Anne. Thinking of other gig employers out there who must be worried by this ruling. What would you say to them?”
Anne Sammon: “So I think the first thing I would say is take some legal advice because what you’re going to want to do is work out whether or not you’ve got a risk of those individuals being employees or workers, independent of the contractual documentation. If the contractual documentation is just bad as in it doesn’t help your case, then there are things that you could potentially do to improve that so that it’s more reflective of the reality of the situation, but fundamentally, if your individuals are workers or employees, then revising the contracts won’t necessarily resolve those problems because, as we’ve seen from the Supreme Court, what they’re looking at is what the situation actually is, not the kind of original starting point that we thought we had in all of this which was is the contractor a sham, if so then we look at those issues about employment status.”
This is just one of a number of programmes we’ve made on the Uber case – there are so many angles to cover – and more to come. Stuart Neilson has talked to this programme at length about how ‘control comes at a cost’ for UK gig employers. That programme is available for viewing now from the Outlaw website.